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January 15, 2017

Online Vets Grow Into a New Adult Industry

This article originally ran in the December 2017 issue of AVN magazine. Click here for a link to the digital edition. Attendees at the Internext Expo can learn more about this subject at a seminar titled Going Green: The Pot & Porn Connection. The seminar takes place today (January 15) at 1 p.m. in Festival Hall C at Hard Rock Hotel & Casino Las Vegas. Many in the adult industry viewed the recent U.S. elections as a two-issue event. Who would win control of the White House, and how would California voters decide the Prop 60 condom regulation? To the relief of adult businesses interests Prop 60 was voted down by a narrow 54- to 46-percent margin, but another measure on the California ballot may have had even greater implications for many veterans of the adult industry who have been gaining traction in another adult-oriented industry as voters in Florida, North Dakota and Arkansas approved medical marijuana initiatives for the first time, while voters in Montana also rolled back restrictions on an existing medical marijuana law. Even more significantly, California, Massachusetts and Nevada approved recreational marijuana initiatives, joining Washington, Colorado, Alaska and Oregon as states that now allow adults over the age of 21 to purchase marijuana legally without any medical authorization. Outside the United States, Canada is already onboard with national legalization and the Deloitte report titled Recreational Marijuana: Insights and Opportunities concludes that Prime Minister Justin Trudeau’s legalization of cannabis next year will create a weed market requiring production of 600,000 kilograms of marijuana annually, which is far more than the existing 36 licensed producers grow for medicinal purposes currently. The explosive growth is reminding many of the dotcom revolution, and many of the same people who were quick to capitalize on the digital evolution of blue content are already hard at work developing ways to ride this new green wave as well. “I’m always fascinated by people who suggest they are leaving adult to get into something else, when the reality is that so many companies and business owners now have a hand in many different businesses,” said Stewart Tongue, president of EngineFood.com in adult and WeedStoreReviews.com in cannabis. “So much of what I am doing in one industry feeds off the other or is accelerated by what past experience has taught me. Running a successful marijuana store review site is a hell of a lot simpler when you have already built and operated several successful review sites in adult. It’s not as simple as porting over a few scripts, obviously, but it definitely saved me hundreds of hours and I often feel déjà vu when solving a challenge in the green industry that has already come up in a slightly different way in the blue industry before.” Many agreed that the mindset of working in adult online is where most of the useful similarities and competitive advantages come into play. “Shifting from adult to cannabis isn’t as easy as some people think,” said Jimmy James of HugeApeMedia, the parent company of many brands in cannabis, including HighOC.com. “Yes, there are legal obstacles to overcome in both, but the specifics are very different and cannabis has a lot more state-to-state challenges to deal with than porn, which is typically regulated on a more federally level playing field currently. Still, the adapt-or-die mentality that is beaten into every successful adult pioneer is exceptionally valuable in any emerging market, and the get-it-done attitude that comes from years of working with forward-thinking people online who see a high barrier to entry as a way to secure their opportunities is definitely part of the reason we are succeeding where others who never spent a day in adult online have already failed.” In some cases cannabis is permitted in places where adult has still yet to break through. “Jimmy makes a great point about the adapt or die axiom of adult,” echoed Tongue. “There is a misconception that just because weed and porn are both taboo they are much the same. Yes, there are similarities, as backyard growers turn into online weed brands the way many video rental businesses evolved into online porn stores back in the day. However, other aspects are very different. For example, WeedStoreReviews.com became one of the first major cannabis sites to have its mobile app available for download in the iTunes and Google Play app stores. Now anyone can download our app on their iPhone or Android device straight from the largest app stores in the world—which is something no adult video site has managed to be able to arrange effectively. Nothing specific that I did in adult enabled me to get into iTunes with Weed Store Reviews, but I can tell you we had our submission rejected 14 times for unexplained reasons before it was accepted. I am genuinely thankful the adult online industry instilled in me the successful approach of figuring out unexplained hurdles independently, being persistent, and working every possible angle until all your goals get reached.” When the adult industry came online it represented a major change in the way adult content would be produced, distributed and consumed for the entire blue industry. Peepshows and DVDs eventually became webcams, tubes and dating entities that capitalized on the advantages of presenting customers with a frictionless sales funnel, dynamic content downloads and a much faster pace of evolution than brick-and-mortar stores could contend with in many segments of the industry. Now as savvy veterans of adult transition into the green industry to pioneer the way cannabis is marketed and monetized, many are making use of all the lessons they have already learned. “A shoe store owner or real estate agent who wants to get into cannabis may have some skills that apply, but inevitably they need to solve digital problems like how to process payments online, where to host their sites, how to acquire targeted web traffic, where to find reliable developers who work well with products intended for mature consumers and so on,” said Justin Rose of GrowThisFast.com and Monetize.xxx, companies that focus on acquiring properly targeted traffic for products and services in each industry. “When I discuss strategy with someone who has a background in adult, I don’t need to start at square one. They already fully understand the language of landing pages, traffic targets, ad networks, tracking software and all the other tools needed to turn ad dollars into revenue. It’s just a matter of helping them calibrate their existing tools and showing them new channels that work well. On the other hand, when I work with someone who was never in adult, it can take a dozen emails just to get the message across that buying clicks blindly from a friend of a friend of a friend is almost always a huge mistake.” The same sort of caveats are already becoming clear for social media efforts as well. “We have had some pretty good success and some harsh outcomes bringing cannabis to social media outlets, and our experience in adult is priceless for our own ventures thus far,” explained Lauren MacEwen of 7Veils.com. “For starters, we were able to build a large presence on Facebook for marijuana clients of ours very rapidly, but then Facebook suddenly decided one day to close down hundreds of accounts in the sector without reason. Since then they seem to be allowing cannabis to regain a presence, but it’s Facebook and as anyone in adult already knows, their ‘rules’ aren’t something you can rely on long term. Having multi-platform redundancies for brands we manage has been crucial to smoothing out the bumps in the road and building momentum in ways that no single platform can shut off by fiat. Adult has taught us the value of establishing brands beyond any one profile or platform, so our clients are able to leverage Facebook, Twitter, Instagram, LinkedIn, Reddit, unique domains, publicity, email, SEO outlets and many other venues simultaneously—while so many others in cannabis lose their entire audience the moment anyone who works for Facebook decides to shut them off.” Even among adult-friendly alternatives to mainstream platforms, an adult pedigree makes a big difference. “Unlike Google, BoodiGo is a search engine that is completely agnostic to the kinds of legal content that it spiders for consumers,” said BoodiGo President Colin Rowntree. “Our BoodiAds backend allows business owners to buy the targeted traffic of many keywords that Adwords disallows, without the fear that we might change our minds or shut down mature content that is clearly desired by consenting adults. What I find interesting is that many new buyers from mainstream start out by asking us what is allowed, and then backtracking to see if they can make their business model fit. Conversely, adult businesses start by deciding what they want to accomplish and then backtrack to find a way to fit their goals into existing regulations. It’s a difference in mindset that often distinguishes those who figure out a way to make something happen, from those who have great ideas but fail to follow through. I’m happy to work with anyone in adult or mainstream on legal cannabis … though it’s fair to say I find working with people from adult to be much faster and simpler at the start.” Perhaps more than anything, adult has taught business owners that money is what matters most. It’s fine to talk about traffic, followers, branding and esoteric political glory, but at the end of the day if you aren’t making money you are doing it all wrong. When adult first began there was no infrastructure for processing credit cards online. That changed, and over time a robust high-risk processing industry evolved around adult. Today, nearly every item can be found and paid for online with credit cards and several other alternative payment options available. Marijuana ought to be able to benefit from the billing infrastructure that already exists thanks to the porn pioneers of the past, and the technology is certainly applicable, but a federal prohibition on sales has caused most banks and processing companies to stand on the sidelines waiting for new laws to be enacted that legalize the banking and billing of the cannabis industry. Now that seems to be changing, and once again, it’s people who have experience in adult leading the charge. “We started handling the ‘green space’ this year and the response has been overwhelming,” said Mike Ackerman, president of ActuallyHelping.com. “It hasn’t been easy offering terminals, processing for VISA and MasterCard, as well as depositing for the legal cannabis industry, but after some hard work and a lot of legal consultation we have managed to navigate the road to a successful offering.” Many are still operating on the assumption that marijuana can not be paid for with a credit card, but those from adult who know how to ask around are already building an important competitive advantage by working together with people who have earned their trust in the blue side of online business over the last two decades. “The biggest surprise to me was not how many adult businesspeople have gotten into the green industry, but how much more advanced they are in terms of company setups, marketing and the general business acumen they have. It isn’t easy transitioning from one industry to another, but time and time again it seems the ones operating in this space with the most success are coming from a strong online marketing background and almost invariably they have some connection to adult already.” As nations become far more socially liberal—rejecting condom laws and legalizing marijuana—the opportunity to capitalize on shifting sentiments by hustling online are obvious. Navigating new regulations, exploring new kinds of user experiences, and making sense of the uncertainty that naturally occurs in any nascent B2B network where nobody has a complete Rolodex already in place is something adult online pioneers are doing very well on the fly, while many others are still stuck in the digital starting gate waiting for the light to turn completely green.

 
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